Revels v. MISS AMERICA ORGANIZATION

• Decision Date: 06 July 2004
• Docket Number: No. COA03-1194.,COA03-1194.
• Citation: 599 S.E.2d 54
• Court: North Carolina Court of Appeals
• Parties: Rebekah Chantay REVELS, Plaintiff, v. MISS AMERICA ORGANIZATION, Miss North Carolina Pageant Organization, Inc., Alan Clouse, Billy Duncan, Charlene Hay, Doug Huff, Tom Roberts, David Clegg, Beverly Adams, and Candace Russell, Defendants.

599 S.E.2d 54

Rebekah Chantay REVELS, Plaintiff, v. MISS AMERICA ORGANIZATION, Miss North Carolina Pageant Organization, Inc., Alan Clouse, Billy Duncan, Charlene Hay, Doug Huff, Tom Roberts, David Clegg, Beverly Adams, and Candace Russell, Defendants.

No. COA03-1194.

Court of Appeals of North Carolina.

July 6, 2004.

Barber & Wilson, P.A., by Timothy C. Barber, Sean T. Partrick, Andrew H.D. Wilson, and Leslie Hickman-Loucks, Greenville, for defendant-appellant Miss America Organization.

Barry Nakell, Chapel Hill, for plaintiff-appellee.

ELMORE, Judge.

In this appeal, we must determine whether the trial court erred in denying defendant Miss America Organization's (MAO) amended motion to compel arbitration of the dispute between MAO and plaintiff Rebekah Chantay Revels. For the reasons stated herein, we conclude that the trial court did not err, and we affirm the trial court's order.

The factual and procedural background is as follows: On 22 June 2002, plaintiff was designated "Miss North Carolina 2002" by defendant Miss North Carolina Pageant Organization, Inc. (MNCPO) after winning a public contest sponsored by MNCPO. MNCPO is a franchisee of MAO pursuant to a document entitled "Miss America Organization Official Franchise Agreement," (the Franchise Agreement), the terms of which required MNCPO to conduct a public contest (the State Finals) to select Miss North Carolina and to prepare Miss North Carolina for participation in the Miss America pageant (the National Finals). In return, MAO agreed to "accept the winner of the State Finals conducted by [MNCPO] ... as a contestant in the National Finals provided that [MNCPO] has complied with the terms hereof and with such other rules and regulations as may be promulgated from time to time by MAO." Plaintiff and MNCPO executed a document entitled "Miss North Carolina 2002 Contract" whereby plaintiff was recognized as Miss North Carolina 2002 and agreed to "represent the State of North Carolina and [MNCPO] in the [National Finals]...."

On 24 June 2002, following her selection as Miss North Carolina, plaintiff signed a document entitled "The Miss America Organization Application and Contract for Participation in the National Finals of the Miss America Competition" (the Application and Contract), which set forth plaintiff's duties and obligations regarding her competition in the National Finals. By signing the Application and Contract, plaintiff represented, inter alia, that she was "of good moral character and [she had] not been involved at any time in any act of moral turpitude" and that she had "never ... engaged in any activity ... that is or could reasonably be characterized as dishonest, immoral, or indecent." The Application and Contract also contained the following provisions, which are at the heart of the present appeal:

2.8.4. Attorney Review of Application and Contract. I have been given a sufficient opportunity to review this Application and Contract.... I have also had the opportunity to consult with an attorney of my own choosing to give me legal advice with regard to this Application and Contract.... (x) I have decided that I do not need to do so (check applicable choice)....

....

6.10. Applicability of New Jersey Law. This Application and Contract and its attachments shall be construed and interpreted under the laws of the State of New Jersey.

....

6.12. Arbitration of Disputes. Any controversy or claim arising out of or relating to this Application and Contract or any breach thereof shall be submitted to arbitration in Atlantic City, New Jersey in accordance with the Rules of the American Arbitration Association. Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This section shall not in any way affect the rights of MAO to (1) seek injunctive relief as provided in Section 6.9 of this Application and Contract, or (2) take any action permitted by this Application and Contract to enforce the eligibility standards of the Program in the event that time does not permit the completion of an arbitration process before action must be taken.

Significantly, the Application and Contract was signed by plaintiff, but was never signed by any representative of MAO.

On 19 July 2002, MAO received an anonymous e-mail, later determined to have been sent by plaintiff's ex-boyfriend, implying that plaintiff had formerly cohabited with a "male non-relative" and that nude photographs of plaintiff existed. MAO forwarded the e-mail to MNCPO. Thereafter, in a meeting with MNCPO's Board of Directors, plaintiff confirmed the existence of the photographs. On 22 July 2002, MAO's Board of Directors voted to ask plaintiff to resign as Miss North Carolina, and if plaintiff refused to resign, to exclude her from competing in the National Finals. After MAO's decision was conveyed to MNCPO, the MNCPO Board of Directors likewise voted to ask plaintiff to resign, and to terminate her reign as Miss North Carolina 2002 if she did not. On 23 July 2002, plaintiff tendered her resignation as Miss North Carolina 2002.

On 1 September 2002, Plaintiff commenced the litigation underlying this appeal by filing a complaint, naming only MAO as a party defendant, in Robeson County Superior Court. Plaintiff's complaint asserted claims for breach of contract and specific performance, and also sought injunctive relief. On 4 September 2002, Chief Justice I. Beverly Lake of the North Carolina Supreme Court entered an order designating the matter as an exceptional case pursuant to Rule 2.1 of the General Rules of Practice for Superior and District Courts, and assigned the case to the Honorable Narley L. Cashwell of Wake County Superior Court.¹ On 5 September 2002, MAO filed a Notice of Removal in the United States District Court for the Eastern District of North Carolina, Southern Division, removing the matter to federal court on the basis of diversity of citizenship.² On 6 September 2002, MAO filed (1) a Motion to Dismiss and Answer, and (2) a Motion to Compel Arbitration. Following an evidentiary hearing, the Honorable James C. Fox, Senior United States District Judge, denied plaintiff's motion for a preliminary injunction by order entered 19 September 2002. MAO's motion to compel arbitration was held in abeyance pending plaintiff's response.

On 21 October 2002, plaintiff filed a Motion For Leave to File First Amended Complaint, by which plaintiff sought to add as parties defendant MNCPO and the individual members of its Board of Directors and Executive Committee.³ Plaintiff also sought to assert additional claims against MAO. On 5 December 2002, Judge Fox entered an order which allowed plaintiff's motion to amend, and, because addition of the new parties defendant destroyed diversity of citizenship, remanded the case to Robeson County Superior Court.⁴ In pleading her breach of contract claim against MAO in the amended complaint, plaintiff specifically alleged that "Plaintiff and Defendants MAO and MNCPO entered into the [Application and Contract]." Plaintiff's breach of contract claim against MAO is therefore grounded, at least in part, on the assertion that the Application and Contract — which contained an arbitration clause as set forth above and was signed by plaintiff, but not by MAO — represents a valid and binding agreement between plaintiff and MAO. In its amended answer to plaintiff's first amended complaint MAO acknowledged only that plaintiff signed the Application and Contract. For purposes of defending against the merits of plaintiff's breach of contract claim, MAO asserted therein, and continues to assert before this Court, that the Application and Contract does not represent a valid and binding agreement between MAO and plaintiff.

On 17 January 2003, MAO filed an Amended Motion to Compel Arbitration "pursuant to [the Application and Contract] signed by Plaintiff ... on or about June 24, 2002[.]" In support of its motion, MAO alleged that "on or about June 24, 2002, Plaintiff ... signed [the Application and Contract][,]" and "pursuant to Section 6.12 [of the Application and Contract], any controversy or claim arising out of or relating to the application and contract or any breach thereof shall be submitted to arbitration in Atlantic City, New Jersey...."

MAO's amended motion to compel arbitration came on for hearing before Judge Cashwell on 3 February, 2003. By order entered 31 March 2003, Judge Cashwell denied MAO's motion to compel arbitration. Judge Cashwell's order contained the following pertinent findings of fact:

17. In her original and amended Complaints the Plaintiff has alleged and asserted the existence of a written contract between the Plaintiff and MAO. Specifically, the Plaintiff has alleged and asserted that Exhibit C (Court's Exhibit 1) to her First Amended Complaint [the Application and Contract] is a copy of that contract. While Court's Exhibit 1 does not bear the signature of an agent or representative of MAO showing acceptance of same, the Plaintiff has alleged in conclusory language without supporting factual allegations that MAO accepted this contract.

18. [The Application and Contract] provides in pertinent part[]... [that] [a]ny controversy or claim arising out of or relating to this Application and Contract or any breach thereof shall be submitted to arbitration in Atlantic City, New Jersey....

19. The Plaintiff asserts two approaches in arguing her opposition to MAO's Amended Motion to Compel Arbitration. Under neither approach does the Plaintiff deny the existence of a contract, [the Application and Contract], between the Plaintiff and MAO.

20. Under her first approach the Plaintiff argues the Amended Motion to Compel Arbitration should be denied because MAO has denied in its Amended Answer that [the Application and Contract] is a contract between MAO and Plaintiff and further that MAO has denied accepting same and acting in reliance on it as a valid contract binding on MAO and thusly

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